Sysco to buy US Foods for about $3.5 billion

Feel free to read the details of the press release closely and notice how the deal is trumpeted as a way to cut costs for the companies involved and nothing about their “product” quality.

“Restaurants and other customers tend to want more than one supplier, and Mr. Delaney acknowledged that the merger could cause customers who use both Sysco and US Foods to go elsewhere for some of their products. “In our model, we have factored in that risk,” Mr. Delaney said. “We have been a little more conservative on our sales growth for the first couple years…but we are going to do everything we can to minimize customer flight.”

And this of course:

Sysco estimates the combined company will have about 25% of the U.S. food distribution market, up from about 18% now for Sysco alone.

WSJ

Advertisements